Correlation Between Laureate Education and Ihuman
Can any of the company-specific risk be diversified away by investing in both Laureate Education and Ihuman at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Laureate Education and Ihuman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Laureate Education and Ihuman Inc, you can compare the effects of market volatilities on Laureate Education and Ihuman and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Laureate Education with a short position of Ihuman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laureate Education and Ihuman.
Diversification Opportunities for Laureate Education and Ihuman
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Laureate and Ihuman is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Laureate Education and Ihuman Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ihuman Inc and Laureate Education is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Laureate Education are associated (or correlated) with Ihuman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ihuman Inc has no effect on the direction of Laureate Education i.e., Laureate Education and Ihuman go up and down completely randomly.
Pair Corralation between Laureate Education and Ihuman
Given the investment horizon of 90 days Laureate Education is expected to generate 0.52 times more return on investment than Ihuman. However, Laureate Education is 1.91 times less risky than Ihuman. It trades about 0.16 of its potential returns per unit of risk. Ihuman Inc is currently generating about 0.02 per unit of risk. If you would invest 1,542 in Laureate Education on August 30, 2024 and sell it today you would earn a total of 351.00 from holding Laureate Education or generate 22.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Laureate Education vs. Ihuman Inc
Performance |
| Timeline |
| Laureate Education |
| Ihuman Inc |
Laureate Education and Ihuman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Laureate Education and Ihuman
The main advantage of trading using opposite Laureate Education and Ihuman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laureate Education position performs unexpectedly, Ihuman can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Ihuman will offset losses from the drop in Ihuman's long position.| Laureate Education vs. Universal Technical Institute | Laureate Education vs. Strategic Education | Laureate Education vs. Grand Canyon Education | Laureate Education vs. American Public Education |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bonds Directory module to find actively traded corporate debentures issued by US companies.
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